We have already touched on the new television deal but recent news makes a quick revisit worthwhile. According to TP reporter John Reid the Pelicans have not exercised the option on 2012 draft pick Austin Rivers. If that holds through October 31st Rivers will become an unrestricted free agent this coming summer. This is not the first time Demps has dealt with declining fourth year options; he did the same thing with Al-Farouq Aminu before the 2012-13 season. Of course after the season Aminu was signed for the exact same contract number.
So the Pelicans will have an additional $3.1 Million in cap space this summer? Not so fast my friend.
Salary Cap Situation
Eric Gordon has a player option next year for $15.5 Million. Every player in the league wants to have a contract that expires in the summer of 2016; all Eric Gordon has to do is say yes and he will be paid over market value AND hit free agency at precisely the right time. He is opting in despite the dreams of Pelican fans and writers (myself included).
Omer Asik's cap hold is 150% of his salary, just over $12.5 Million. The Pelicans probably hope they can re-sign him for a number lower than that. Nikola Vucevic just signed for 4 years/$54 Million. Marcin Gortat signed for 5 years/$60 Million. Tiago Splitter signed for 4 years/$36 Million last summer. Big men continue to get more expensive and a price between Splitter's $9 Million a year average and Vucevic's $13.5 Million average gives the Pelicans a little wiggle room. But not much.
Even on the low end (Splitter) the Pelicans will have about $66 Million in committed salaries and cap holds. If there is no "smoothing" of the cap increase the 2015-16 cap is estimated at $66.5 Million. Declining to pick up the fourth year option for Rivers provides absolutely no additional flexibility with the salary cap.
If the league does decide to smooth the cap to $72 Million or so AND Asik signs for $9 Million a season (still low if you ask me) the Pelicans would hypothetically have about $6 Million in cap space and the room exception of $2.8 Million. Again, that is at the absolute max involving both a huge increase thanks to smoothing (some estimates put it at a lower $70 Milion) and Asik signing for an absolute steal of a deal. Which, hint, if the smoothing creates that much cap space around the league Asik is not signing for $9 Million a year. Not going to happen.
If, instead, they elect to pick up the fourth year option they would have Rivers, the Mid-Level Exception of $5.4 Million and the Bi-Annual Exception of $2.1 Million. Let's take a look at these two baskets of options side-by-side.
|Do Not Pick Up||Pick Up|
|$6M in Cap Space*||$5.4M MLE|
|$2.8M Room Exception||$2.1M BAE|
*Absolute best case scenario
Austin Rivers has not had the career he, Pelican fans, or Pelican brass would like up to this point. Declining to pick up his option does not appreciably increase the flexibility available to Dell Demps in the immediate future on the salary cap side of things. Further, if Rivers continues to improve holding his restricted free agency rights could be of some value going into the feeding frenzy of the Summer of 2016.
There is some good news in Dell's hesitancy. He might be demonstrating that he is willing to very publicly admit his own mistake in evaluating a player. Nylon Calculus made an excellent statistical argument on getting rid of Austin Rivers.
Let them walk: Austin Rivers, Thomas Robinson, and Meyers Leonard. These players have done little to demonstrate their ability to compete in the NBA. It is highly unlikely that this changes in 2015. The cap and roster flexibility offered by clearing them in 2016 seems an easy choice. These cases are likely less controversial than the third-year options I recommended waiving. All three may ultimately have their options picked up, but there is at least serious consideration in New Orleans and Portland about how to handle these players.
The thing is declining the option on Rivers does not increase flexibility. As I have clearly stated above New Orleans does not have flexibility unless a miracle occurs (Gordon opts-out, which creates more than enough flexibility by itself) or for reasons unknown the Pelicans also allow Omer Asik to walk; creating an enormous 7 foot, 255 pound hole at center.
New Orleans only has seven players under contract next year and two of those (Russ Smith and Patric Young) are unguaranteed minimum deals. They do not lack for roster spots. Rivers' absence does not create functional cap space. Will he be overpaid for his production? Most likely, yes. Does his removal improve the situation? No.
There simply is not enough gained by declining the option to support the decision. A series of miracles (the cap being smoothed so severely to increase it nearly $9 Million and Omer Asik signing for significantly less than market value in a market flush with cap space) are necessary to support this decision on its face.
Does Demps have another move to play? Does declining the option make Rivers an asset more easily moved? Is this actually about avoiding the luxury tax (doubtful to be reached, but on the fringes of possibility) next summer? These are questions Pelican writers and fans ask themselves frequently when seemingly minor moves go down. Right now the eight-ball says the reply is hazy. Maybe try again in a week?